Namibia is experiencing an annual outflow of over N$500 million in insurance premiums due to the absence of local insurers for the marine and aviation sectors.
According to the Namibia Financial Institutions Supervisory Authority (NAMFISA), the lack of domestic underwriting capacity forces businesses to seek cover from foreign markets.
“We are experiencing an annual outflow of approximately N$500 million in premiums due to the lack of local capacity to underwrite marine and aviation insurance. These types of business involve significant risk exposure and complex underwriting requirements. As a result, businesses must apply to NAMFISA for exemptions in order to obtain policies from foreign insurers,” said Erich Gariseb, NAMFISA’s General Manager of Insurance and Medical Aid Funds.
He noted that the insurance classes affected include marine, aviation, and miscellaneous categories.
“The majority of these premiums relate to aviation, marine, and miscellaneous classes of insurance. Marine insurance is essential for the fishing, import/export, and logistics sectors. The miscellaneous category includes cover for liability, property damage, personal accident, and goods in transit related to marine and aviation activities,” Gariseb explained.
These premiums are primarily directed to large foreign insurance markets with the financial capacity and expertise to absorb the high risks associated with these industries.
Gariseb emphasized that this enables Namibian businesses to access critical insurance coverage and remain operational in key sectors such as mining and fishing.
“This access to foreign insurance allows businesses in high-risk industries to continue operating within Namibia and contributing to local economic development. Most foreign insurance exemption approvals are granted to capital-intensive sectors, particularly mining and fishing,” he said.
He added that the trend is not new, as Namibian insurers have historically steered clear of underwriting marine and aviation insurance due to the high-risk exposure and specialized nature of these fields.
“Namibian insurers generally do not underwrite marine and aviation insurance at scale. These lines of business entail considerable risk and require complex underwriting expertise. Consequently, businesses and individuals seeking such specialised cover must apply to NAMFISA for exemption to obtain policies from foreign insurers,” he said.
As a result, most marine and aviation insurance premiums are channelled to Lloyd’s of London and other major international insurance markets with the capacity to underwrite such risks.
To address the continued outflow of premiums, several mitigation strategies have been proposed, including building local underwriting expertise, creating insurance pools, and fostering regional cooperation.
“To mitigate the outflow of marine and aviation insurance premiums to foreign markets, several strategies may be considered. These include developing local specialist underwriting capacity, establishing public-private insurance pools, and forming strategic reinsurance partnerships to retain part of the risk domestically. Regional collaboration could also help pool expertise and risk, strengthening the sector’s ability to underwrite complex, high-value risks,” Gariseb said.
